The darkest hour, confidence is more important than gold.
Written by: Yanz & Liam
Edited by: Liam
"This time I really sold!"
On April 22, the ETH/BTC exchange rate briefly fell to 0.01766, setting a new low since 2020.
Lin Feng, who has been consistently investing and firmly holding Ethereum for four years, could no longer endure it and posted a heartbroken declaration in his social circle. Compared to simply cutting losses, this felt more like a collapse of faith, a farewell to dreams.
On the same day, institutional investors also took action.
Galaxy Digital swapped ETH for SOL, and crypto VC Paradigm transferred 5,500 ETH (approximately $8.66 million) to the brokerage platform Anchorage, suspected to be for sale preparation.
Ironically, one of the institutions joining the selling frenzy was the Ethereum Foundation. A wallet associated with the Ethereum Foundation deposited 1,000 ETH (approximately $1.58 million) into Kraken.
Ethereum, once regarded as the vanguard of the blockchain revolution, seems to have reached its darkest hour.
Behind this collective exodus are stories of forced farewells to ideals, as well as difficult choices between faith and profit.
And all of this is recorded, witnessed, and remembered in a group chat called "Ethereum Asylum."
Ethereum Asylum
"Our original group name was actually not 'Ethereum Asylum', but 'I was wrong, I regret buying Ethereum'."
On February 3, 2025, the cryptocurrency market collectively plummeted, with Ethereum dropping 25% at one point, hitting a low of $2,080.19 per coin, catching many Ethereum holders off guard, including Orange.
Orange, who previously worked at a venture capital firm (VC), entered the crypto market in 2021, and his research on Ethereum technology laid the foundation for his faith in the space.
However, when Ethereum's price fell to $3,300, Orange felt uneasy and repeatedly murmured, leading to the creation of the group chat "I was wrong, I regret buying Ethereum."
On February 3, Orange panicked—"I can't escape, what about the brothers?"
In search of psychological comfort and to huddle together for warmth, this small group, originally consisting of just six friends, began to welcome more "mistaken people": there were big players like Big Orange and Du Jun, as well as senior VCs, all gathering here to heal each other and seek solace.
As Ethereum continued to decline, the number of "patients" increased daily, gradually expanding and stabilizing at 250 people within a month—Orange said: "Buying Ethereum is 'two hundred and fifty'", a deliberately controlled number carrying a hint of self-deprecation.
"At first, some people shouted to buy the dip at $3,000, then it dropped to $2,500, $2,100, and the voices of buying the dip grew quieter. In the end, everyone started joking, saying that those who wanted to buy the dip should call Teacher Yang Yongxin. So we changed the group name to 'Ethereum Asylum' because everyone felt they had gone crazy."
Image source: Big Orange @0xVeryBigOrange
As the group owner, Orange witnessed all of this. He is an observer and also a member firmly locked in the asylum. But he feels helpless, and it can even be said that most of the people who stayed in the group feel helpless.
Orange can't help but reminisce about that summer of 2020.
That summer, Uniswap's trading volume surpassed Coinbase, and the liquidity mining sparked by Compound made countless people rich overnight, as the concept of decentralized finance (DeFi) swept through the entire cryptocurrency world.
DeFi Summer was like a fervent technological feast, with Ethereum as the protagonist, attracting the attention of countless investors and developers.
For traditional Web2 VC practitioners like Orange, this was not only an opportunity to make money but also an enlightenment and baptism of thought.
"We really did a lot of research back then," Orange recalled, "Vitalik and the Ethereum Foundation (EF) painted many 'big pies', such as sharding technology and zero-knowledge proofs… At that time, we thought this was the future."
Similarly, Lin Feng also bought Ethereum in the summer of 2020, filled with hope and excitement for Ethereum's vision as a "world computer."
"At that time, as an Ethereum holder, I was very proud; this was true value investing, a civilization-level innovation."
In addition to individuals like Orange and Lin Feng, a large number of traditional VCs also entered the emerging Web3 space that summer, filled with curiosity and longing for the new frontier.
As the founder and spiritual leader of Ethereum, Vitalik's every word and action received widespread attention, and everyone followed his guidance to invest and lay out their strategies. Many VCs heavily bet on Ethereum's ecological infrastructure, with the valuations of ZK and Layer 2 projects favored by Vitalik skyrocketing—Scroll valued at $1.8 billion, zkSync at $2 billion, Starknet at $8 billion… Various capital poured in, betting on Ethereum's scaling dreams.
However, after the DeFi Summer craze subsided, in the new cycle, the technological narrative was abandoned by investors, replaced by its opposite, MEME, as if it were a mockery.
"We were very firm in believing that Solana would not become the 'Ethereum killer', but now it seems that the market doesn't care about core issues like privacy and security." This divergence left Orange feeling helpless, but what truly trapped him was his deep affection for Ethereum.
As a loyal believer, he not only held a large amount of Ethereum during the bull market but also chose to stake ETH for long-term returns. However, when the market entered a winter, and ETH's price plummeted while staked assets could not be withdrawn, Orange, like many members of the asylum, found himself in a dilemma.
In fact, most of these trapped individuals are not speculators with a "get rich quick" mentality; rather, they are long-term holders who have experienced multiple market fluctuations and have a certain understanding of Ethereum, commonly referred to as "old leeks."
The irony of this cycle is vividly reflected here—paper hands are rewarded, while diamond hands are punished, constantly enduring the dual torment of reality and perception.
For them, Ethereum is both a symbol of hope and an inescapable shackle.
They love Ethereum because it represents technological innovation and future possibilities; they also hate Ethereum because the pain and difficulties brought by the price drop are real.
For Lin Feng, the pain of selling Ethereum comes partly from real financial loss, but more from "damage to his principles." He entered the crypto world through Ethereum, considering himself a value investor. He was once proud of investing in Ethereum, but now reality has led him to deny his former self. What makes him even more ashamed is that he realizes his previously boasted faith was not steadfast; in the face of the continuously declining K-line, he could not help but look at the price and ultimately chose to cut losses and give up.
Lin Feng sold Ethereum and also sold his former dreams.
However, most of the patients are still waiting in the "ward." Not only do they desire to break even and be discharged, but the dreams they planted in the story from three years ago are also waiting for another scorching summer.
No New Stories for Ethereum
"This year, Ethereum has not seen any paradigm innovation!"
Well-known KOL Big Orange is also a member of the Ethereum Asylum, and on Twitter, he is seen as the "E Guardian Leader" by many.
On March 21, 2024, Big Orange tweeted, "From today, I am a die-hard bull for Ethereum. If Ethereum doesn't reach a new historical high before May, I will eat shit."
Despite his passionate love, Big Orange also admits that Ethereum currently lacks innovation.
"There is nothing new that catches people's attention," said Yuan Jie, co-founder of the public chain Conflux, who once aspired to create an "Ethereum killer" and witnessed the rise and fall of the Ethereum ecosystem.
The previous cycle's DeFi, NFT, and GameFi booms still linger in his memory, "At that time, there were a lot of new things to learn every day, and participating in the learning process could also yield good financial returns."
In the "golden age," Ethereum had the best stories. That year, the on-chain ecosystem experienced explosive growth, and the "Ethereum cult" reached its peak, with capital, developers, and users' attention highly concentrated on certain specific directions (such as Layer 2, DeFi, ZK technology, etc.) and once blindly expanded, with investors coming and going in a bustling manner.
The narratives from three years ago nourished the prosperity of the last cycle, but now, such stories have come to an end.
Just as land loses its fertility due to over-farming, when discussing the present, Yuan Jie stated, "Vitalik's personal charm has overly involved him in guiding the industry's direction and route planning, leading to the failure of Ethereum's resource allocation."
Whether in terms of technological breakthroughs or new applications in the ecosystem, Ethereum has failed to provide enough freshness to attract the market's attention.
Like a frog in boiling water, the Ethereum main chain is facing a dilemma of "gradually barren land."
"On-chain transaction volume and activity are very low, the entire ecosystem has cooled down, which has led to Ethereum's deflationary mechanism (EIP-1559) not functioning well," in Big Orange's view, the EIP-1559 deflationary mechanism is like a beautifully designed irrigation system, but in the absence of sufficient "water sources" (liquidity), this system can only appear superficial and cannot provide real nourishment for the Ethereum ecosystem.
More complex is that on this barren land, "blood-sucking flowers" have bloomed.
Layer 2, which carries Ethereum's scaling dreams, has each Layer 2 paying homage to Ethereum as the orthodox, yet each has built its own kingdom, sucking the value from the Ethereum mainnet, continuously weakening Ethereum's control over its own ecosystem.
"Everyone is competing to transfer Ethereum's assets to their own chains because the more they transfer, the higher their points, and when the time comes, they will receive more airdrop tokens," Yuan Jie appeared somewhat excited, attributing these "blood-sucking flowers" born from short-term profit-seeking mindsets and the current homogenization of the ecosystem to the "prisoner's dilemma" of human nature.
Yuan Jie believes this may not have been Vitalik's original intention, but in planning to use Layer 2 to expand Ethereum's ecological boundaries, he overlooked the human nature of "everyone wanting to get rich quickly and competing for the same inheritance," ultimately "falling into a cycle of internal competition and self-destruction."
The Layer 2 networks are highly fragmented, severing user experience and on-chain liquidity, and the composability advantage that Ethereum's mainnet once prided itself on during DeFi Summer has vanished, while Solana, with its simple characteristic of "speed," has become a habitat for many consumer applications.
"Now when I think of ETH, I think of ATOM, and I'm really afraid ETH will repeat ATOM's fate."
Lin Feng believes that ETH's predicament is similar to ATOM's, both experiencing "value shifting upstream."
In the Cosmos ecosystem, various sovereign application chains (such as OSMO, JUNO, etc.) are interconnected through the IBC protocol, but they capture the value of their own ecosystems, while ATOM, as the central hub, has failed to effectively capture value from these chains.
After the rise of various Ethereum L2s, relying on sequencers, they have gained substantial MEV and transaction fee income, significantly reducing the value flowing back to the Ethereum mainnet, weakening ETH's value capture ability.
"If the Ethereum main chain successfully upgrades and significantly enhances its capacity, then Ethereum may truly welcome a new peak of development," Big Orange believes.
How to Reshape Greatness?
On April 22, as many institutions sold ETH, F2Pool co-founder WangChun once again exchanged 50 WBTC for 2,794 ETH, worth approximately $4.36 million, bringing a glimmer of hope to those who still hold ETH.
Ethereum, this land that once nurtured countless innovative fruits, seems to need a long "fallow period."
During the fallow period, some cut losses, while others held firm.
Big Orange chose to hold firm. The bull market of 2021 brought him substantial gains, and his feelings for Ethereum have long transcended a mere investment relationship. For him, ETH is not just an asset; it is more like a faith.
Among the remaining "E Guardians," everyone has transformed into external advisors to the Ethereum Foundation, offering suggestions for Ethereum based on their respective "reform measures," which can be roughly divided into two factions.
One faction is on the right, advocating for bold reforms, believing that Ethereum should pursue "practicality" more and should comply, "getting close to authority."
For example, Orange believes that Ethereum needs to "stop playing dead" and actively embrace compliance.
"Since the dawn of humanity, some things have already been predetermined. You cannot contend with the state machinery. If you want to survive well or showcase your functions, you should not oppose the entire state machinery."
Between ideals and bread, the Ethereum Foundation needs to strike a balance. Yuan Jie does not deny the Ethereum Foundation's focus on pure academic discussion and technological innovation, but a pragmatic business department is necessary.
"If Trump is in power, we need Trump to accept Ethereum, then we need someone who doesn't dislike Trump to deal with him. If Vitalik can't do it himself, then he can let others do it. A good foundation, as a non-profit organization, should be able to accommodate various decisions."
Lin Feng even believes that the Ethereum Foundation has been overly focused on ideology in the past, neglecting true creation and construction, and has been too "weak." The Ethereum Foundation needs a Trump-like reform figure to completely overhaul the atmosphere.
The other faction is on the left, believing that Ethereum's greatest value lies in "decentralization, the last bastion of idealism in the crypto world aside from Bitcoin."
Well-known KOL Blue Fox Notes states that he focuses on Ethereum for one reason, "Will it continue to maintain decentralization, security, and trustlessness as core values in the future? If it maintains these, I will continue to support it; if it changes, I will leave regardless of the price."
"The crypto world needs an internationalist warrior; aside from the vanished Satoshi Nakamoto, no one compares to Vitalik," investor Jacob states. Despite facing significant financial losses in his Ethereum investment, he still recognizes Ethereum's uncompromising values against authority.
"SOL and other emerging high-performance public chains are essentially driven by capital logic, and high efficiency naturally attracts market attention, but Ethereum represents a new form of human civilization."
Behind this left-right struggle is a different understanding of blockchain priorities—is it pragmatic, pursuing efficiency and commercial success, or is it steadfast in decentralization and the spirit of freedom?
In the darkest hour, confidence is more important than gold.
IOSG founder Jocy calls out, "Ethereum will not perish; it is the most successful decentralized organization in the Web3 industry. Looking to the future, please cherish the Ethereum in your hands and view its value and innovation from a ten-year perspective."
Returning to that "Ethereum Asylum," the refuge born out of panic has now become a corner witnessing history.
Whether it was the moment Lin Feng pressed the sell button, or Big Orange's steadfast holding every day, or the emotional fluctuations Orange observed in the asylum, they are all recording and shaping the history of Ethereum.
No matter what the future holds, whether it is leaving or holding firm in the present, those who once went crazy for Ethereum will always remember that scorching summer and the Ethereum that once made them believe in the future.
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